exv10w32







 




    EXHIBIT 10.32



 




    CHANGE IN CONTROL
    AGREEMENT



 



    This Change in Control Agreement (this “Agreement”),
    effective as of December 30, 2008, is made between ABM
    Industries Incorporated, a Delaware corporation (the
    “Company”), and the individual executing this
    Agreement as the Executive on the signature page (the
    “Executive”).



 




    RECITALS



 



    A. The Executive is a senior executive of the Company and
    has made and is expected to continue to make major contributions
    to the short- and long-term profitability, growth and financial
    strength of the Company;



 



    B. The Company recognizes that the possibility of a Change
    in Control exists and that such possibility, and the uncertainty
    it may create among management, may result in the distraction or
    departure of management personnel, to the detriment of the
    Company and its stockholders, including a reduction of the value
    received by stockholders in a Change in Control transaction;



 



    C. The Executive and the Company are party to a Severance
    Agreement dated August 1, 2008 (the “Prior
    Agreement”);



 



    D. The parties desire to amend and restate the Prior
    Agreement to reflect changes required to comply with
    Section 409A and Section 162(m) of the Code and to
    revise the definition of “Cause” set forth in the
    Prior Agreement;



 



    E. The Company desires to assure itself of both present and
    future continuity of management and to establish fixed severance
    benefits for certain of its senior executives, including the
    Executive, applicable in the event of a Change in
    Control; and



 



    F. The Company desires to provide additional inducement for
    the Executive to continue to remain in the employ of the
    Company. Accordingly, the Company and the Executive agree as
    follows:



 



    1.  Certain Defined Terms.  In
    addition to terms defined elsewhere herein, the following terms
    have the following meanings when used in this Agreement with
    initial capital letters:



 



    (a) “After-Tax Amount” means the amount to be
    received by an Executive determined on an after-tax basis taking
    into account the excise tax imposed pursuant to
    Section 4999 of the Code, or any successor provision
    thereto, any tax imposed by any comparable provision of state
    law and any applicable federal, state and local income and
    employment taxes.



 



    (b) “Base Pay” means the Executive’s annual
    base salary rate as in effect at the time a determination is
    required to be made under Section 4.



 



    (c) “Board” means the Board of Directors of the
    Company; any action of the Board herein contemplated will be
    valid if adopted by a majority of the total number of directors
    then in office or a majority of the Incumbent Directors and, for
    purposes of interpreting, amending or waiving any portion of
    this Agreement, may be adopted by a majority of the Incumbent
    Directors by written action, whether or not unanimous, or may be
    delegated by specific action of the Board of Directors after the
    date hereof to any directorate committee comprised solely of
    Incumbent Directors who are also Independent Directors.



 



    (d) “Cause” shall mean, with respect to the
    Executive: (i) the willful and continued failure to
    substantially perform the Executive’s duties and
    responsibilities for reasons other than death or disability,
    after a written demand for substantial performance is delivered
    to him/her by the Company which specifically identifies the
    manner in which the Company believes that the Executive has not
    substantially performed the Executive’s duties;
    (ii) the Executive’s conviction (or entry of a plea
    bargain admitting criminal guilt) of any felony or a misdemeanor
    involving moral turpitude; (iii) intentional breach by the
    Executive of
    his/her
    fiduciary obligations to the Company or any securities laws
    applicable to the Company; or (iv) intentional wrongful
    engagement by the Executive in any Competitive Activity; and,
    for purposes of this subsection (iv), any such act shall have
    been demonstrably and materially harmful to the Company. For
    purposes of this Agreement, no act or failure






    

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    to act on the part of the Executive will be deemed
    “intentional” if it was due primarily to an error in
    judgment or negligence, but will be deemed
    “intentional” only if done or omitted to be done by
    the Executive not in good faith and without reasonable belief
    that the Executive’s action or omission was in the best
    interest of the Company.



 



    (e) “Change in Control” means that during the
    Term any of the following events occurs, provided that the
    occurrence of such event constitutes a “change in effective
    ownership or control” of the Company, as defined in
    Section 409A:



 



    (i) any individual, entity or group (within the meaning of
    Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a
    “Person”) (A) is or becomes the beneficial owner
    (within the meaning of
    Rule 13d-3
    promulgated under the Exchange Act) of more than 35% of the
    combined voting power of the then-outstanding Voting Stock of
    the Company or succeeds in having nominees as directors elected
    in an “election contest” within the meaning of
    Rule 14a-12(c)
    under the Exchange Act and (B) within 18 months after
    either such event, individuals who were members of the Board of
    Directors of the Company immediately prior to either such event
    cease to constitute a majority of the members of the Board of
    Directors of the Company; or



 



    (ii) a majority of the Board ceases to be comprised of
    Incumbent Directors; or



 



    (iii) the consummation of a reorganization, merger,
    consolidation, plan of liquidation or dissolution,
    recapitalization or sale or other disposition of all or
    substantially all of the assets of the Company or the
    acquisition of the stock or assets of another corporation, or
    other transaction (each, a “Business Transaction”),
    unless, in any such case, (A) no Person (other than the
    Company, any entity resulting from such Business Transaction or
    any employee benefit plan (or related trust) sponsored or
    maintained by the Company, any Subsidiary or such entity
    resulting from such Business Transaction) beneficially owns,
    directly or indirectly, 35% or more of the combined voting power
    of the then-outstanding shares of Voting Stock of the entity
    resulting from such Business Transaction or, if it is such
    entity, the Company and (B) at least one-half of the
    members of the Board of Directors of the entity resulting from
    such Business Transaction were Incumbent Directors at the time
    of the execution of the initial agreement providing for such
    Business Transaction.



 



    (f) “Code” means the Internal Revenue Code of
    1986, as amended.



 



    (g) “Competitive Activity” means the
    Executive’s participation, without the written consent
    signed by an officer of the Company and authorized by the Board,
    in the management of any business enterprise if (i) such
    enterprise engages in substantial and direct competition with
    the Company and such enterprise’s sales of any product or
    service competitive with any product or service of the Company
    amounted to 10% of such enterprise’s net sales for its most
    recently completed fiscal year and if the Company’s net
    sales of said product or service amounted to 10% of the
    Company’s net sales for its most recently completed fiscal
    year or (ii) the primary business done or intended to be
    done by such enterprise is in direct competition with the
    business of providing facility services in any geographic market
    in which the Company operates. “Competitive Activity”
    will not include the mere ownership of securities in any such
    enterprise and the exercise of rights appurtenant thereto, if
    such ownership is less than 5% of the outstanding voting
    securities or units of such enterprise.



 



    (h) “Employee Benefits” means the benefits and
    service credit for benefits as provided under any and all
    employee retirement income and welfare benefit policies, plans,
    programs or arrangements in which the Executive is entitled to
    participate, including without limitation any stock option,
    performance share, performance unit, stock purchase, stock
    appreciation, savings, pension, supplemental executive
    retirement, or other retirement income or welfare benefit,
    deferred compensation, incentive compensation, group or other
    life, health, medical/hospital or other insurance (whether
    funded by actual insurance or self-insured by the Company or a
    Subsidiary), disability, salary continuation, expense
    reimbursement and other employee benefit policies, plans,
    programs or arrangements that may now exist or any equivalent
    successor policies, plans, programs or arrangements that may be
    adopted hereafter by the Company or a Subsidiary, providing
    benefits






    

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    and service credit for benefits at least as great in the
    aggregate as are payable thereunder immediately prior to a
    Change in Control.



 



    (i) “ERISA” means the Employee Retirement Income
    Security Act of 1976, as amended.



 



    (j) “Excess Parachute Payment” means a payment
    that creates an obligation for Executive to pay excise taxes
    under Section 280G of the Code or any successor provision
    thereto.



 



    (k) “Exchange Act” means the Securities Exchange
    Act of 1934, as amended.



 



    (l) “Good Reason” means the occurrence of one or
    more of the following events:



 



    (i) Failure to elect or reelect or otherwise to maintain
    the Executive in the office or the position he had with the
    Company immediately prior to a Change in Control, or a
    substantially equivalent or better office or position than that
    which he had with the Company immediately prior to the Change in
    Control, in either such case with the Company, any legal
    successor to the Company or, if the Company merges with or into
    another entity with substantial operations, with respect to the
    business of the Company and its Subsidiaries substantially as
    conducted immediately prior to the Change in Control;



 



    (ii) Failure of the Company to remedy any of the following
    within 30 calendar days after receipt by the Company of written
    notice thereof from the Executive: (A) a significant
    adverse change in the nature or scope of the authorities, powers
    or functions attached to the position with the Company which the
    Executive held immediately prior to the Change in Control,
    (B) a material reduction in the Executive’s Base Pay,
    (C) a material reduction in the Executive’s Incentive
    Pay Opportunity or Incentive Pay Target, or (D) the
    termination or denial of the Executive’s rights to material
    Employee Benefits or a material reduction in the scope or value
    thereof, unless such termination or reduction referred to in
    clauses (B), (C) or (D) applies on a substantially
    similar basis to all executives of the Company and its parent
    entities or such right is replaced with a right with a
    substantially similar scope or value;



 



    (iii) The liquidation, dissolution, merger, consolidation
    or reorganization of the Company or the transfer of all or
    substantially all of its business
    and/or
    assets, unless the successor or successors (by liquidation,
    merger, consolidation, reorganization, transfer or otherwise) to
    which all or substantially all of its business
    and/or
    assets have been transferred (by operation of law or otherwise)
    assumed all duties and obligations of the Company under this
    Agreement pursuant to Section 11(a);



 



    (iv) If the Executive’s principal residence at the
    time in question is within 35 miles of the Company’s
    headquarters or the headquarters of the Subsidiary that is
    Executive’s employer, the Company requires the Executive to
    have Executive’s principal location of work changed to any
    location that is in excess of 50 miles from such residence
    without Executive’s prior written consent; or



 



    (v) Without limiting the generality or effect of the
    foregoing, any material breach of this Agreement or any Other
    Employment Agreement (as defined in Section 6) by the
    Company or any successor thereto which is not remedied by the
    Company within 10 calendar days after receipt by the Company of
    written notice from the Executive of such breach.



 



    A termination of employment by the Executive for one of the
    reasons set forth in clauses (i) - (v), above, will
    not constitute “Good Reason” unless, within the
    60-day
    period immediately following the occurrence of such Good Reason
    event, the Executive has given written notice to the Company
    specifying in reasonable detail the event or events relied upon
    for such termination and the Company has not remedied such event
    or events within 30 days of the receipt of such notice. The
    Company and the Executive may mutually waive in writing any of
    the foregoing provisions with respect to an event or events that
    otherwise would constitute Good Reason.



 



    (m) “Incumbent Directors” means the individuals
    who, as of the date hereof, are Directors of the Company and any
    individual becoming a Director subsequent to the date hereof
    whose election, nomination for election by the Company’s
    shareholders or appointment was approved by a vote of at least
    two-thirds of the then Incumbent Directors (either by a specific
    vote or by approval of the proxy statement of the Company in
    which such person is named as a nominee for director, without
    objection to such nomination); provided,






    

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    however, that an individual shall not be an Incumbent Director
    if such individual’s election or appointment to the Board
    occurs as a result of an actual or threatened election contest
    (as described in
    Rule 14a-12(c)
    of the Exchange Act) with respect to the election or removal of
    Directors or other actual or threatened solicitation of proxies
    or consents by or on behalf of a Person other than the Board.



 



    (n) “Incentive Pay” means compensation in
    addition to Base Pay determined by reference to one or more
    performance measures, whether payable in cash, securities or
    otherwise.



 



    (o) “Incentive Pay Opportunity” means the maximum
    amount of Incentive Pay that the Executive would receive
    pursuant to any Incentive Pay Plan in existence immediately
    prior to a Change in Control (disregarding the effects of the
    Change in Control, including without limitation increased
    depreciation or amortization, financing expense and transaction
    costs), assuming satisfaction of all thresholds or other
    conditions thereto established (i) prior to the Change in
    Control or (ii) after the Change in Control either
    (A) with the Executive’s specific prior written
    approval or (B) by action of a committee of the Board
    comprised solely of Independent Directors.



 



    (p) “Incentive Pay Plan” means any plan, program,
    agreement or arrangement (excluding employee stock options,
    restricted stock or other rights the value of which is
    determined solely by reference to the value of the
    Company’s common stock).



 



    (q) “Incentive Pay Target” means the amount or
    value of Incentive Pay the Executive would have received
    assuming that the Incentive Pay Plans in effect immediately
    prior to the Change in Control continue unchanged and are
    satisfied at the target level and, if applicable, any conditions
    to entitlement to payment at the target level thereunder that
    are not measured by the Company’s results of operation are
    satisfied at the target level.



 



    (r) “Independent Directors” means directors who
    qualify as “independent” directors under
    then-applicable New York Stock Exchange rules applicable to
    compensation committees (whether or not the Company’s
    securities continue to be listed for trading thereon).



 



    (s) “Other Agreement” means an agreement,
    contract or understanding (including any option or equity plan
    or agreement) other than this Agreement, heretofore or hereafter
    entered into by the Executive with the Company or any Subsidiary.



 



    (t) “Retirement Plans” means the benefit plans of
    the Company that are intended to be qualified under
    Section 401(a) of the Code and any supplemental executive
    retirement benefit plan or any other plan that is a successor
    thereto as such Retirement Plans were in effect immediately
    prior to the Change in Control and if the Executive was a
    participant in such Retirement Plan immediately prior to the
    Change in Control.



 



    (u) Section 162(m) means Section 162(m) of the
    Code, and the regulations and guidance promulgated thereunder,
    or any successor statute.



 



    (v) Section 409A means Section 409A of the Code,
    and the regulations and guidance promulgated thereunder, or any
    successor statute.



 



    (w) “Severance Period” means the period of time
    commencing on the date of the first occurrence of a Change in
    Control and continuing until the earlier of (i) the second
    anniversary of the occurrence of the Change in Control and
    (ii) the Executive’s death.



 



    (x) “Subsidiary” means an entity in which the
    Company directly or indirectly beneficially owns 50% or more of
    the outstanding Voting Stock.



 



    (y) “Term” means the period commencing as of the
    date hereof and expiring on the close of business on
    December 31, 2008; provided, however, that
    (i) commencing on January 1, 2009 and each January 1
    thereafter, the term of this Agreement will automatically be
    extended for an additional year unless, not later than September
    30 of the immediately preceding year, the Company or the
    Executive shall have given notice that it or the Executive, as
    the case may be, does not wish to have the Term extended;
    (ii) if a Change in Control occurs during the Term, the
    Term will expire on the last day of the Severance Period; and
    (iii) subject to Section 3(c), if, prior to a Change
    in Control, the Executive ceases for any reason to be a
    full-time






    

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    employee of the Company, thereupon without further action the
    Term shall be deemed to have expired and this Agreement will
    immediately terminate and be of no further effect.



 



    (z) “Termination Date” means the date on which
    the Executive’s employment is terminated (the effective
    date of which will be the date of termination, or such other
    date that may be specified by the Executive if the termination
    is pursuant to Section 3(b)).



 



    (aa) “Voting Stock” means securities entitled to
    vote generally in the election of directors.



 



    (bb) “Welfare Benefits” means Employee Benefits
    that are provided under any “welfare plan” (within the
    meaning of Section 3(1) of ERISA) of the Company, and
    fringe benefits and other perquisites of employment, such as car
    allowances, club dues, financial planning and product discounts.



 



    2.  Operation of
    Agreement.  This Agreement will be effective
    and binding immediately upon its execution, but, anything in
    this Agreement to the contrary notwithstanding, except as
    provided in Section 3(c), this Agreement will not be
    operative unless and until a Change in Control occurs. Upon the
    occurrence of a Change in Control at any time during the Term,
    without further action, this Agreement will become immediately
    operative.



 



    3.  Termination Following a Change in
    Control.  (a) In the event of the
    occurrence of a Change in Control, the Executive’s
    employment may be terminated by the Company during the Severance
    Period and the Executive will be entitled to the benefits
    provided by Section 4 unless such termination is the result
    of the occurrence of one or more of the following events:



 



    (i) The Executive’s death;



 



    (ii) if the Executive becomes permanently disabled within
    the meaning of, and begins actually to receive disability
    benefits pursuant to, the long-term disability plan in effect
    for, or applicable to, the Executive immediately prior to the
    Change in Control; or



 



    (iii) Cause.



 



    If, during the Severance Period, the Executive’s employment
    is terminated by the Company other than pursuant to
    Section 3(a)(i), 3(a)(ii) or 3(a)(iii), the Executive will
    be entitled to the benefits provided by Section 4, provided
    that such termination constitutes a “separation from
    service” as defined in Section 409A.



 



    (b) In the event of the occurrence of a Change in Control,
    the Executive may terminate employment with the Company during
    the Severance Period for Good Reason with the right to severance
    compensation as provided in Section 4 regardless of whether
    any other reason, other than Cause, for such termination exists
    or has occurred, including without limitation other employment.



 



    (c) Nothing in this Agreement will (i) be construed as
    creating an express or implied contract of employment, changing
    the status of Executive as an employee at will, giving Executive
    any right to be retained in the employ of the Company, or giving
    Executive the right to any particular level of compensation or
    benefits or (ii) interfere in any way with the right of the
    Company to terminate the employment of the Executive at any time
    with or without Cause, subject in either case to the obligations
    of the Company under this Agreement.



 



    4.  Severance
    Compensation.  (a) If, following the
    occurrence of a Change in Control, the Company terminates the
    Executive’s employment during the Severance Period other
    than pursuant to Section 3(a)(i), 3(a)(ii) or 3(a)(iii), or
    if the Executive terminates Executive’s employment pursuant
    to Section 3(b) (any such termination, a “Triggering
    Termination”), provided that such Triggering Termination
    constitutes a “separation from service” as defined in
    Section 409A, the Company will pay to the Executive the
    amounts described in Annex A within five business days
    after the Termination Date (subject to the provisions of
    Section 4(d) of this Agreement) and will continue to
    provide to the Executive the benefits described in Annex A
    for the periods described therein.



 



    (b) Without limiting the rights of the Executive at law or
    in equity, if the Company fails to make any payment or provide
    any benefit required to be made or provided hereunder on a
    timely basis, the Company will pay interest on the amount or
    value thereof at an annualized rate of interest equal to the
    “prime rate” as set forth from time to time during the
    relevant period in The Wall Street Journal “Money
    Rates” column, plus 200 basis points,






    

    6








 







    compounded monthly, or, if less, the maximum rate legally
    allowed. Such interest will be payable as it accrues on demand.
    Any change in such prime rate will be effective on and as of the
    date of such change.



 



    (c) Unless otherwise expressly provided by the applicable
    plan, program or agreement, after the occurrence of a Change in
    Control, the Company will pay in cash to the Executive a lump
    sum amount equal to the sum of (i) any unpaid Incentive Pay
    that has been earned, accrued, allocated or awarded to the
    Executive for any performance period that by its terms as in
    effect prior to a Triggering Termination has been completed (any
    such period, a “Completed Performance Period”)
    (regardless of whether payment of such compensation would
    otherwise be contingent on the continuing performance of
    services by the Executive) and (ii) the Pro Rata Portion of
    the Incentive Pay Target in effect for any subsequent
    performance period. For this purpose, “Pro Rata
    Portion” means (x) the number of days from and
    including the first day immediately following the last day of
    the immediately preceding Completed Performance Period to and
    including the Termination Date, divided by (y) the total
    number of days in such subsequent performance period. Such
    payments will be made at the earlier of (x) the date
    prescribed for payment pursuant to the applicable plan, program
    or agreement and (y) within five business days after the
    Termination Date, and will be payable and calculated
    disregarding any otherwise applicable vesting requirements.



 



    (d) To the extent required in order to avoid accelerated
    taxation
    and/or tax
    penalties under Section 409A, amounts that would otherwise
    be payable and benefits that would otherwise be provided
    pursuant to this Agreement during the six-month period
    immediately following the Executive’s termination of
    employment shall instead be paid on the first business day after
    the date that is six months following the Executive’s
    termination of employment (or upon the Executive’s death,
    if earlier). In addition, for purposes of this Agreement, each
    amount to be paid or benefit to be provided shall be construed
    as a separate identified payment for purposes of
    Section 409A, and any payments described in Annex A
    that are due within the “short term deferral period”
    as defined in Section 409A shall not be treated as deferred
    compensation unless applicable law requires otherwise.



 



    5.  Limitations on Payments and
    Benefits.  Notwithstanding any provision of
    this Agreement or any Other Agreement to the contrary, if any
    amount or benefit to be paid or provided under this Agreement or
    any Other Agreement would be an Excess Parachute Payment
    (including after taking into account the value, to the maximum
    extent permitted by Section 280G of the Code, of the
    covenants in Section 8 hereof), but for the application of
    this sentence, then the payments and benefits to be paid or
    provided under this Agreement and any Other Agreement will be
    reduced to the minimum extent necessary (but in no event to less
    than zero) so that no portion of any such payment or benefit, as
    so reduced, constitutes an Excess Parachute Payment; provided,
    however, that the foregoing reduction will not be made if such
    reduction would result in Executive receiving an After-Tax
    Amount less than 90% of the After-Tax Amount of the severance
    payments he or she would have received under Section 4 or
    under any Other Agreement without regard to this clause. Whether
    requested by the Executive or the Company, the determination of
    whether any reduction in such payments or benefits to be
    provided under this Agreement or otherwise is required pursuant
    to the preceding sentence, and the value to be assigned to the
    Executive’s covenants in Section 8 hereof for purposes
    of determining the amount, if any, of the Excess Parachute
    Payment will be made at the expense of the Company by the
    Company’s independent accountants or benefits consultant.
    The fact that the Executive’s right to payments or benefits
    may be reduced by reason of the limitations contained in this
    Section 5 will not of itself limit or otherwise affect any
    other rights of the Executive pursuant to this Agreement or any
    Other Agreement. In the event that any payment or benefit
    intended to be provided is required to be reduced pursuant to
    this Section 5, the Executive will be entitled to designate
    the payments
    and/or
    benefits to be so reduced in order to give effect to this
    Section 5, provided, however, that payments that do not
    constitute deferred compensation within the meaning of
    Section 409A shall be reduced first. The Company will
    provide the Executive with all information reasonably requested
    by the Executive to permit the Executive to make such
    designation. In the event that the Executive fails to make such
    designation within 10 business days after receiving notice from
    the Company of a reduction under this Section 5, the
    Company may effect such reduction in any manner it deems
    appropriate.



 



    6.  No Mitigation Obligation; Other
    Agreements.  (a) The Company hereby
    acknowledges that it will be difficult and may be impossible for
    the Executive to find reasonably comparable employment following
    the Termination Date. Accordingly, the payment of the severance
    compensation by the Company to the Executive in accordance with
    the terms of this Agreement is hereby acknowledged by the
    Company to be reasonable, and the






    

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    Executive will not be required to mitigate the amount of any
    payment provided for in this Agreement by seeking other
    employment or otherwise, nor will any profits, income, earnings
    or other benefits from any source whatsoever create any
    mitigation, offset, reduction or any other obligation on the
    part of the Executive hereunder or otherwise, except as
    expressly provided in Paragraph 2(E) of Annex A.



 



    (b) A termination of employment pursuant to
    Section 3(a), 3(b) or 3(c) will not affect any rights that
    the Executive may have pursuant to any agreement, policy, plan,
    program or arrangement of the Company or Subsidiary providing
    Employee Benefits, which rights will be governed by the terms
    thereof. To the extent that the Executive receives payments by
    reason of his or her termination of employment pursuant to any
    other employment or severance agreement or employee plan
    (collectively, “Other Employment Agreements”), the
    amounts otherwise receivable under Section 4 will be
    reduced by the amounts actually paid pursuant to the Other
    Employment Agreements, but not below zero, to avoid duplication
    of payments so that the total amount payable or value of
    benefits receivable hereunder and under the Other Employment
    Agreements is not less than the amounts so payable or value so
    receivable had such benefits been paid in full hereunder.



 



    7.  Legal Fees and
    Expenses.  It is the intent of the Company
    that the Executive not be required to incur legal fees and the
    related expenses associated with the interpretation, enforcement
    or defense of Executive’s rights in connection with any
    dispute arising under this Agreement because the cost and
    expense thereof would substantially detract from the benefits
    intended to be extended to the Executive hereunder. Accordingly,
    if it should appear to the Executive that the Company has failed
    to comply with any of its obligations under this Agreement or in
    the event that the Company or any other person takes or
    threatens to take any action to declare this Agreement void or
    unenforceable, or institutes any proceeding designed to deny, or
    to recover from, the Executive the benefits provided or intended
    to be provided to the Executive hereunder, the Company
    irrevocably authorizes the Executive from time to time to retain
    counsel of Executive’s choice, at the expense of the
    Company as hereafter provided, to advise and represent the
    Executive in connection with any such dispute or proceeding.
    Without respect to whether the Executive prevails, in whole or
    in part, in connection with any of the foregoing, the Company
    will pay and be solely financially responsible for any and all
    reasonable attorneys’ and related fees and expenses
    incurred by the Executive in connection with any of the
    foregoing; provided that, in regard to such matters, the
    Executive has not acted in bad faith or with no colorable claim
    of success. The Executive shall promptly submit a written
    request for reimbursement of such expenses, but in no event
    later than ninety days following the date on which such expenses
    were incurred, accompanied by such evidence of fees and expenses
    incurred as the Company may reasonably require, and such
    reimbursements will be made within thirty business days after
    delivery of the Executive’s written requests for payment.



 



    8.  Competitive Activity; Confidentiality;
    Nonsolicitation.  (a) For the period
    following the Termination Date specified in Paragraph
    (3) of Annex A (the “Non-Competition
    Period”), subject to the Executive’s receipt of
    benefits under Section 4, the Executive will not, without
    the prior written consent of the Company, which consent will not
    be unreasonably withheld, engage in any Competitive Activity.



 



    (b) During the Term, the Company agrees that it will
    disclose to Executive its confidential or proprietary
    information (as defined in this Section 8(b)) to the extent
    necessary for Executive to carry out Executive’s
    obligations to the Company. The Executive hereby covenants and
    agrees that Executive will not, without the prior written
    consent of the Company, during the Term and two years thereafter
    disclose to any person not employed by the Company, or use in
    connection with engaging in competition with the Company, any
    confidential or proprietary information of the Company. For
    purposes of this Agreement, the term “confidential or
    proprietary information” will include all information of
    any nature and in any form that is owned by the Company and that
    is not publicly available (other than by Executive’s breach
    of this Section 8(b)) or generally known to persons engaged
    in businesses similar or related to those of the Company.
    Confidential or proprietary information will include, without
    limitation, the Company’s financial matters, customers,
    employees, industry contracts, strategic business plans, product
    development (or other proprietary product data), marketing
    plans, and all other secrets and all other information of a
    confidential or proprietary nature. For purposes of the
    preceding two sentences, the term “Company” will also
    include any Subsidiary (collectively, the “Restricted
    Group”). The obligations imposed by this Section 8(b)
    will not apply (i) during the Term, in the course of the
    business of and for the benefit of the Company, (ii) if
    such confidential or proprietary information has become, through
    no fault of the Executive, generally known to the public or
    (iii) if the Executive is required by law to make
    disclosure (after giving the Company notice and an opportunity
    to contest such requirement).





    

    8








 







    (c) The Executive hereby covenants and agrees that for a
    period ending one year after the Termination Date Executive will
    not, without the prior written consent of the Company, which
    consent will not unreasonably be withheld as to Executive’s
    personal assistant, on behalf of Executive or on behalf of any
    person, firm or company, directly or indirectly, attempt to
    influence, persuade or induce, or assist any other person in so
    persuading or inducing, any employee of the Restricted Group to
    give up, or to not commence, employment or a business
    relationship with the Restricted Group.



 



    (d) Executive and the Company agree that the covenants
    contained in this Section 8 are reasonable under the
    circumstances and subject to the provisions of Section 14
    of this Agreement. Executive acknowledges and agrees that the
    remedy at law available to the Company for breach of any of
    Executive’s obligations under this Section 8 would be
    inadequate and that damages flowing from such a breach may not
    readily be susceptible to being measured in monetary terms.
    Accordingly, Executive acknowledges, consents and agrees that,
    in addition to any other rights or remedies that the Company may
    have at law, in equity or under this Agreement, upon adequate
    proof of Executive’s violation of any such provision of
    this Agreement, the Company will be entitled to immediate
    injunctive relief and may obtain a temporary order restraining
    any threatened or further breach, without the necessity of proof
    of actual damage.



 



    9.  Employment
    Rights.  Nothing expressed or implied in this
    Agreement will create any right or duty on the part of the
    Company or the Executive to have the Executive remain in the
    employment of the Company or any Subsidiary prior to or
    following any Change in Control.



 



    10.  Withholding of
    Taxes.  The Company may withhold from any
    amounts payable under this Agreement all federal, state, city or
    other taxes as the Company is required to withhold pursuant to
    any applicable law, regulation or ruling.



 



    11.  Successors and Binding
    Agreement.  (a) The Company will require
    any successor (whether direct or indirect, by purchase, merger,
    consolidation, reorganization or otherwise) to all or
    substantially all of the business or assets of the Company, by
    agreement in form and substance reasonably satisfactory to the
    Executive, expressly to assume and agree to perform this
    Agreement in the same manner and to the same extent the Company
    would be required to perform if no such succession had taken
    place. This Agreement will be binding upon and inure to the
    benefit of the Company and any successor to the Company,
    including without limitation any persons acquiring directly or
    indirectly all or substantially all of the business or assets of
    the Company whether by purchase, merger, consolidation,
    reorganization or otherwise (and such successor will thereafter
    be deemed the “Company” for the purposes of this
    Agreement), but will not otherwise be assignable, transferable
    or delegable by the Company.



 



    (b) This Agreement will inure to the benefit of and be
    enforceable by the Executive’s personal or legal
    representatives, executors, administrators, successors, heirs,
    distributees and legatees.



 



    (c) This Agreement is personal in nature and neither of the
    parties hereto will, without the consent of the other, assign,
    transfer or delegate this Agreement or any rights or obligations
    hereunder except as expressly provided in Sections 11(a)
    and 11(b). Without limiting the generality or effect of the
    foregoing, the Executive’s right to receive payments
    hereunder will not be assignable, transferable or delegable,
    whether by pledge, creation of a security interest, or
    otherwise, other than by a transfer by Executive’s will or
    by the laws of descent and distribution and, in the event of any
    attempted assignment or transfer contrary to this
    Section 11(c), the Company will have no liability to pay
    any amount so attempted to be assigned, transferred or delegated.



 



    12.  Notices.  For all
    purposes of this Agreement, all communications, including
    without limitation notices, consents, requests or approvals,
    required or permitted to be given hereunder will be in writing
    and will be deemed to have been duly given when hand delivered
    or dispatched by electronic facsimile transmission (with receipt
    thereof orally confirmed), or five business days after having
    been mailed by United States registered or certified mail,
    return receipt requested, postage prepaid, or three business
    days after having been sent by a nationally recognized overnight
    courier service such as FedEx or UPS, addressed to the Company
    (to the attention of the Secretary of the Company) at its
    principal executive office and to the Executive at
    Executive’s principal residence, or to such other address
    as any party may have furnished to the other in writing and in
    accordance herewith, except that notices of changes of address
    will be effective only upon receipt.





    

    9








 







    13.  Governing Law.  The
    validity, interpretation, construction and performance of this
    Agreement will be governed by and construed in accordance with
    the substantive laws of the State of Delaware and federal law,
    without giving effect to the principles of conflict of laws of
    such State, except as expressly provided herein. In the event
    the Company exercises its discretion under Section 8(d) to
    bring an action to enforce the covenants contained in
    Section 8 in a court of competent jurisdiction where the
    Executive has breached or threatened to breach such covenants,
    and in no other event, the parties agree that the court may
    apply the law of the jurisdiction in which such action is
    pending in order to enforce the covenants to the fullest extent
    permissible.



 



    14.  Validity.  If any
    provision of this Agreement or the application of any provision
    hereof to any person or circumstance is held invalid,
    unenforceable or otherwise illegal, including without limitation
    Section 8 hereof, the remainder of this Agreement and the
    application of such provision to any other person or
    circumstance will not be affected, and the provision so held to
    be invalid, unenforceable or otherwise illegal will be reformed
    to the extent (and only to the extent) necessary to make it
    enforceable, valid or legal. If any covenant in Section 8
    should be deemed invalid, illegal or unenforceable because its
    time, geographical area, or restricted activity, is considered
    excessive, such covenant will be modified to the minimum extent
    necessary to render the modified covenant valid, legal and
    enforceable.



 



    15.  Miscellaneous.  No
    provision of this Agreement may be modified, waived or
    discharged unless such waiver, modification or discharge is
    agreed to in writing signed by the Executive and the Company. No
    waiver by either party hereto at any time of any breach by the
    other party hereto or compliance with any condition or provision
    of this Agreement to be performed by such other party will be
    deemed a waiver of similar or dissimilar provisions or
    conditions at the same or at any prior or subsequent time. No
    agreements or representations, oral or otherwise, expressed or
    implied with respect to the subject matter hereof have been made
    by either party that are not set forth expressly in this
    Agreement. The headings used in this Agreement are intended for
    convenience or reference only and will not in any manner
    amplify, limit, modify or otherwise be used in the construction
    or interpretation of any provision of this Agreement. References
    to Sections are to Sections of this Agreement. References to
    Paragraphs are to Paragraphs of an Annex to this Agreement. Any
    reference in this Agreement to a provision of a statute, rule or
    regulation will also include any successor provision thereto.



 



    16.  Survival.  Notwithstanding
    any provision of this Agreement to the contrary, the
    parties’ respective rights and obligations under
    Sections 3(c), 4, 5, 7, 8, 9, 10, 11(b), 16 and 18 will
    survive any termination or expiration of this Agreement or the
    termination of the Executive’s employment following a
    Change in Control for any reason whatsoever.



 



    17.  Beneficiaries.  The
    Executive will be entitled to select (and change, to the extent
    permitted under any applicable law) a beneficiary or
    beneficiaries to receive any compensation or benefit payable
    hereunder following the Executive’s death, and may change
    such election, in either case by giving the Company written
    notice thereof in accordance with Section 12. In the event
    of the Executive’s death or a judicial determination of the
    Executive’s incompetence, reference in this Agreement to
    the “Executive” will be deemed, where appropriate, to
    the Executive’s beneficiary, estate or other legal
    representative.



 



    18.  Counterparts.  This
    Agreement may be executed in one or more counterparts, each of
    which will be deemed to be an original but all of which together
    will constitute one and the same agreement.



 



    19.  Section 409A.  To
    the extent applicable, it is intended that this Agreement comply
    with the provisions of Section 409A. This Agreement will be
    administered in a manner consistent with this intent, and any
    provision that would cause the Agreement to fail to satisfy
    Section 409A will have no force and effect until amended to
    comply with Section 409A (which amendment may be
    retroactive to the extent permitted by Section 409A and may
    be made by the Company without the consent of the Executive).
    Prior to any Change in Control, the Company and the Executive
    will agree to any amendment of this Agreement approved by the
    Board based on the advice of Skadden, Arps, Slate,
    Meagher & Flom, LLP or any other nationally recognized
    law firm designated by the Board that such amendment, if
    implemented, is or is reasonably likely to reduce any adverse
    effect on the Company or the Executive of any rule, regulation
    or IRS interpretation of Section 409A and that such firm is
    recommending similar changes or provisions to its other clients
    that have
    change-in-control,
    severance or employment agreements or plans.





    

    10








 







    IN WITNESS WHEREOF, the parties have caused this Agreement to be
    duly executed and delivered as of the date first above written.



 



    ABM INDUSTRIES INCORPORATED



 


			
	 	    By: 
	
    /s/  Erin
    Andre








			
	 	    Title: 
	
    Senior Vice President-Human





    Resources



 


			
	 	    Signature: 
	
    /s/  Sarah
    H. McConnell








 


 




    Date:
    December 30, 2008
    





    

    11








 






 




    Annex A



 




    SEVERANCE
    COMPENSATION, ETC.



 



    (1) A lump sum payment in an amount equal to two times the
    sum of (A) Base Pay (at the rate in effect for the year in
    which the Termination Date occurs), plus (B) Incentive Pay
    Target (or, if the Incentive Pay Target shall not have been
    established or shall be reduced after a Change in Control, the
    highest aggregate Incentive Pay Target as in effect for any of
    the three fiscal years immediately preceding the year in which
    the Change in Control occurred).



 



    (2) (A) For any Welfare Benefits that the Executive
    was receiving or entitled to receive immediately prior to the
    Termination Date (or, if greater, immediately prior to the
    reduction, termination or denial described in
    Section 1(1)(ii)) that are considered to be
    “reimbursement arrangements” covered under
    Section 1.409A-1(b)(9)(iv)(A)
    of the Code:



 



    (i) for a period of 18 months following the
    Termination Date (the “Continuation Period”), the
    Company will arrange to provide the Executive with Welfare
    Benefits substantially similar to those that the Executive was
    receiving or entitled to receive immediately prior to the
    Termination Date (or, if greater, immediately prior to the
    reduction, termination, or denial described in Section 1(I)(ii))
    except that the level of any such Welfare Benefits to be
    provided to the Executive may be reduced in the event of a
    corresponding reduction generally applicable to all similarly
    situated recipients of or participants in such Welfare Benefits.
    If and to the extent that any benefit described in this
    Paragraph 2 is not or cannot be paid or provided under any
    policy, plan, program or arrangement of the Company or any
    Subsidiary, as the case may be, then the Company will itself pay
    or provide for the payment to the Executive, Executive’s
    dependents and beneficiaries, of such Welfare Benefits along
    with, in the case of any benefit described in this
    Paragraph 2 that is subject to tax because it is not or
    cannot be paid or provided under any such policy, plan, program
    or arrangement of the Company or any Subsidiary, an additional
    amount such that after payment by the Executive, or
    Executive’s dependents or beneficiaries, as the case may
    be, of all taxes so imposed, the recipient retains an amount
    equal to such taxes. Such tax payment will be made to the
    Executive by the Company no later than
    December 31st of the year in which the Executive
    remits such tax payments to the appropriate taxing authorities.



 



    (ii) the Company will pay to the Executive, in a lump sum
    within the time period described in Section 4(a), an amount
    equal to the difference between (1) the present value of
    the continuation of such benefits for 18 months and
    (2) the present value of the benefits the Executive will
    receive under Paragraph 2(A)(i).



 



    (B) Notwithstanding the foregoing, or any other provision
    of the Agreement, for purposes of determining the period of
    continuation coverage to which the Executive or any of
    Executive’s dependents is entitled pursuant to
    Section 4980B of the Code under the Company’s medical,
    dental and other group health plans, or successor plans, the
    Executive’s “qualifying event” will be the
    termination of the Continuation Period and the Executive will be
    considered to have remained actively employed on a full-time
    basis through that date, provided, however, that (1) with
    respect to health benefits the continuation period will in all
    events terminate on the
    18-month
    anniversary of the termination date as so determined and
    (2) the Company will pay, or reimburse the Executive for,
    all COBRA continuation costs during such period.



 



    (C) For purposes of the immediately preceding sentence and
    for purposes of calculating service or age to determine the
    Executive’s eligibility for welfare benefits, including
    benefits under any retiree medical benefits or life insurance
    plan or policy, the Executive will be considered to have
    remained actively employed on a full-time basis through the
    termination of the Continuation Period.



 



    (D) For any Welfare Benefits that the Executive was
    receiving or entitled to receive immediately prior to the
    Termination Date (or, if greater, immediately prior to the
    reduction, termination, or denial described in
    Section 1(1)(5)) that are not considered to be
    “reimbursement arrangements” covered under
    Section 1.409A-1(b)(9)(iv)(A)
    of the Code, the Company shall pay to the Executive, within the
    time period described in Section 4(a), in a lump sum, an
    amount equal to the present value of the continuation of such
    benefits for 18 months following the Termination Date.



 



    (E) Welfare Benefits otherwise receivable by the Executive
    pursuant to this Paragraph 2 will be reduced to the extent
    comparable Welfare Benefits are actually received by the
    Executive from another employer during the Continuation Period
    following the Executive’s Termination Date, and any such
    Welfare Benefits actually received by the Executive will be
    reported by the Executive to the Company.



 



    (3) The Non-Competition Period contemplated by
    Section 8(a) will be 12 months from the Termination
    Date.





    

    A-1